Any part of a drug that effects the diagnosis, cure, treatment, or prevention of disease, or affects the structure or function of the body.

Advance Directives

A written document stating how you want medical decisions to be made if you lose the ability to make them for yourself. It may include a Living Will and a Durable Power of Attorney for health care.

Advocate

A person who helps or speaks out for another person. Advocates do many kinds of work from making phone calls to working on public policy and may be paid or working as volunteers.

Affiliated Provider

A health care provider or facility that is paid by a health plan to give service to plan members.

Annual Election Period - Medicare

The Annual Election Period for Medicare beneficiaries is the month of November each year. Enrollment will begin the following January.

Area Agency on Aging (AAA)

These are organizations that help older persons (age 60 and over). There are no income eligibility for most services. Area agencies offer free information about community, state and federal programs and services including Social Security, Medicaid and Medicare, help with paperwork and make referrals to other agencies for transportation, home health care and other services.

Asset

Property owned by an individual that has value and could be sold to pay debts. Examples of assets are real estate, savings accounts and stocks and bonds.

A person who receives the benefits or advantages from something such as insurance.

Benefits

The money or services provided by an insurance policy. In a health plan, benefits are the health care you get. Drug benefits are help with the cost of medicine.

Brand Name Drug

A brand name drug is protected by a patent which usually lasts twenty years. Some drugs have more than one brand name, each sold by a different pharmaceutical company. Brand name drugs are approved by the Food and Drug Administration.

A specified amount of money paid to a health plan or doctor. This is used to cover the cost of a health plan member's health care services for a specific length of time.

Catastrophic Coverage

Insurance protection for high health care costs. In Medicare Part D (in 2010), the catastrophic coverage begins after participants have spent $4,550 for medicine. At that point they pay 5% of their drug costs.

Catastrophic Limit

The highest amount of money you have to pay out of your pocket during a certain period of time for certain covered charges.

Certificate of Medical Necessity

A form required by Medicare that allows you to use certain durable medical equipment prescribed by your doctor or one of the doctor's office staff.

CHIP

Children's Health Insurance Program. Federally funded, state administered, health coverage for uninsured low-income children not covered by Medicaid. Available in every state.

Co-Insurance

A cost-sharing requirement of a health insurance policy that means the insured person will pay a portion or percentage of the costs of covered services. After the deductible is paid, this provision obligates the subscriber to pay a certain percentage of any remaining medical bills.

Coordination Of Benefit

A process used by insurers to avoid double payment for health care expenses insured under more than one policy or type of coverage.

Copay

A specific, flat amount that you pay for a specific service (such as $10 per visit,etc.) Usually the copay is so small that its not a barrier to getting care.

Cost Sharing

The cost for medical care that you pay yourself, out of your pocket, like a copayment, coinsurance, or the deductible. These are not the costs covered by insurance.

Coverage

Health care or medicine provided by a health or pharmacy care plan or insurance. Programs will not pay for services or benefits that are not part of its coverage.

Credible Coverage

Insurance deemed "as good as or better than" that provided by Medicare Part D.
If you have such insurance, you will not pay the 1% per month penalty to enroll in a Part D plan after the initial enrollment period.
Examples of credible coverage plans:

The amount you must spend before insurance will take over the cost. This is often called TrOOP (True Out-Of-Pocket) costs, meaning that it is money actually spent not the cost value of something provided at discount or free.

DOB

Date of Birth, usually written as month/day/year as in 09/15/89.

Donut Hole

This refers to a "hole" or gap in coverage. The "donut hole" in Medicare Part D, for example, refers to the gap participants fall into after spending $2,850 in 2010 on prescription drugs. Participants must then incur an additional $4,550 (2010) in out-of pocket expenses to be eligible for drug coverage.

Dosage Form

A dosage form is the physical form in which a drug is produced and dispensed, such as a tablet, a capsule, or an injectable.

Dual Eligible

A beneficiary who is eligible for both Medicare and Medicaid.

Durable Medical Equipment (DME)

Medical equipment that is ordered by a doctor for use in the home. These items must be reusable, such as walkers, wheelchairs, or hospital beds. DME is paid for under both Medicare Part B and Part A for home health service.

Durable Power of Attorney

A legal document that enables you to name another person to act for you in case you become disabled or unable to take care of your personal business.

The Federal Food and Drug Administration. A government agency that ensures that drugs are safe and effective. It is also responsible forsafety of our food supply. Medicine must receive approval from the FDA to be marketed in this country.

Fee Schedule

A complete listing of fees used by health plans to pay doctors or other providers.

Fiscal Year

A twelve month period that is used for accounting and budget planning. It is often different from the calendar year. For example, the federal budget fiscal year runs from October 1 to September 30.

Formulary

A list of specific drugs and dosages provided by a program or company. Patient assistance programs and Medicare Part D drug benefits each have a formulary that includes the drugs that are available through them.

FPL

The Federal Poverty Level. This is an income level used as a guideline used for many low-income assistance programs which changes annually. Click
HERE
to see a chart with the income figures.

Freedom of Information Act (FOIA)

A law that requires the U.S. Government to give out certain information to the public when it receives a written request. FOIA applies only to records of the Executive Branch of the Federal Government, not to those of the Congress or Federal courts, and does not apply to state governments, local governments, or private groups.

In a managed health care plan, this is another name for the primary care doctor. This doctor gives basic medical services and coordinates proper medical care and must make a referral to a specialist in order for that specialist to be covered by the plan.

Generic Drug

A prescription drug that has the same active-ingredient formula as a brand name drug. Generic drugs usually cost less than brand name drugs and are rated by the Food and Drug Administration (FDA) to be as safe and effective as brand name drugs.

Department of Health and Human Services. The Federal department which regulates and administers health and human service programs in the United States. It was known as the Department of Health, Education, and Welfare until 1980. The HHS advises the President on the health, welfare, and income security plans, policies, and programs of the Federal government.

HIPAA

The Health Insurance Portability Accountability Act. This is the Federal law that protects the privacy of individuals' health information.

This refers to a program that is offered for people enrolled in Medicare Part D who have incomes below 150% of the Federal Poverty Level and less than $10,00 in assets for a single person and less than $20,000 for a couple.

A source for brand name and generic prescription and over-the-counter medicines by mail, usually at lower prices than a retail, walk-in pharmacy.

Medicaid

A joint federal and state program that helps with medical costs for some people with low incomes and limited resources. Medicaid programs vary from state to state, but most health care costs are covered if you qualify for both Medicare and Medicaid.

Medicare

The federal health insurance program for people 65 years of age or older, certain younger people with disabilities, and people with End-Stage Renal Disease (permanent kidney failure with dialysis or a transplant, sometimes called ESRD).

Medicare Part A

The part of Medicare that pays for inpatient hospital stays, care in a skilled nursing facility, hospice care and some home health care.

Medicare Part B

Medical Insurance that helps cover doctors' services and outpatient care. It also covers some other medical services that Part A doesn't cover, such as some of the services of physical and occupational therapists, and some home health care. Most people pay a monthly premium.

Medicare Part D (Prescription Drug Coverage)

This Medicare drug benefit is insurance provided by private companies and available to everyone on Medicare. People who choose to enroll select a drug plan, usually according to the drugs the plans will cover.

Office of the Inspector General. Agencies and departments in the federal government each have an OIG which are in place to provide independent over-sight of that agency. There are 57 OIGs. The OIG of Heath and Human Services oversees Medicare and Medicaid.

Ombudsman

An advocate, or supporter, that works to solve problems between an individual and an institution, a program or a company.

Patient Assistance Program. These programs, run by pharmaceutical companies, provide free or low cost medicine to low income individuals that qualify.

Patient Advocate

A hospital employee whose job is to speak on a patient's behalf and help patients get any information or services they need.

Patient Consent

The written or verbal permission given by a patient for the release and use of their personal information.

Payer of Last Resort

This term is used usually in reference to payment for Medicaid services. If Medicaid is the "payer of last resort" it means it will pay for a Medicaid recipient's services only after all other third parties have paid their share.

PBM

Pharmacy Benefit Manager. This is the company that makes decisions about what drugs will be provided by a program such as Medicare Part D. The PBM may require that a less expensive medicine be tried by the patient or limit the quantity of pills available per month.

PDP

Part D Plan. These are drug plans offered by the private companies that provide the Medicare Part drug insurance.

PhRMA

The Pharmaceutical Research and Manufacturers Association. PhRMA is a lobbying group for pharmaceutical companies. Their mission is to encourage the discovery of new medicines. They are another resource for patient assistance programs.

Physician Assistant (PA)

A medically trained professional who can provide many of the health care services traditionally performed by a physician, such as taking medical histories and doing physical examinations, making diagnoses, and prescribing medicine or therapy.

Pre-authorization

This requirement of some health care programs means that a review and approval process must be completed before services, or medications are provided.

Preferred Drug List

A drug list (also called a formulary) that includes drugs that are considered preferred because of their overall ability to meet the patient's needs at a reasonable cost.

Premium

The amount paid for insurance coverage for specific health benefits. Generally, a health insurance plan will have different premium rates for single subscribers, married subscribers and for subscribers with dependants.

Prescriber

A health care provider, usually a physician, who is licensed to prescribe drugs. Other prescribers include dentists, physician assistants, and nurse practitioners.

Primary Care

A level of care by doctors who provide general and family care usually including pediatrics and geriatrics (care of the elderly). Primary care may include obstetrics.

Primary Payer

An insurance policy, plan, or program that pays first on a claim for medical care. This could be Medicare or other health insurance.

Prior Approval

An authorization for the delivery of services that must be obtained before delivery of those services. Commonly used in Medicaid and Medicare programs and managed care plans.

A written OK from your primary care doctor for you to see a specialist or get certain services. In many insurance plans, you must have a referral for that plan to pay for the services of the specialist.

Refill

he process of getting a valid, approved prescription filled one or more times after the initial prescription without consulting the prescribing physician again.

Renewal

The term used when a prescription has exhausted all of its refills and requires the physician to authorize a new prescription. This is considered renewing a prescription.

This is when a second doctor gives his or her view about your medical condition and how you should be treated.

Secondary Payer

An insurance policy, plan, or program that pays second on a claim for medical care. This could be Medicare, Medicaid, or other insurance depending on the situation.

Service Area

The specific area where health plan members can get health services. Some plans that require you to use their doctors and hospitals, which are their service area. The plan may disenroll you if you move out of the plan's service area.

Side Effect

A problem caused by treatment. For example, medicine you take for high blood pressure may make you feel sleepy. Most treatments have some side effects.

Special Enrollment Period (Medicare)

A set time when you can sign up for Medicare Part B or Part D if you didn't sign up during the Initial Enrollment Period.

Spend Down

This is the process by which applicants for programs such as Medicaid spend savings and other resources in order to meet the eligibility requirements.

SSN (Social Security Number)

A nine digit number assigned by the Social Security Administration which provides a program that uses public money to provide funds for workers when they reach retirement age or become disabled. This number is required when you begin your first job.

Step Therapy

This is treatment that begins with less medicine and steps up until the condition is under control. PBM's (see PBM) may require step therapy or documented proof that the lower-cost alternatives were tried first, and failed before approving the more expensive drugs.

Stop Loss

Agreed upon point beyond which a managed care organization is no longer liable for costs.

Subscriber

An individual who is a member of a benefits plan. For example, in the case of family coverage, one adult is ordinarily the subscriber. A spouse and children would ordinarily be dependents.

Subsidy

Money provided by the government to help down keep the price of a service or a commodity such as medicine. Medicare Part D has a Low Income Subsidy for participants who cannot afford the cost of medicine through the program.

(Temporary Assistance to Needy Families) A state-based Federal cash assistance program for low-income families. TANF replaces the former cash assistance program known as Aid to Families with Dependent Children. Unlike the former AFDC program, eligibility for TANF does not automatically convey Medicaid eligibility.

Third Party Payer

The party or group that person makes a contract with to cover health care services. This may be referred to as the "payer".

Treatment Options

The choices you have when there is more than one way to treat your health problem.

TrOOP

True Out-Of-Pocket costs. This is the portion of payments for health services that must be paid by the member, including copayments, deductibles, and medicine. It does not include payments made by insurance for medicine that is provided for free through a patient assistance program.

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